Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York and San Francisco. This is Bloomberg
Speaker 2: Technology coming up.
Speaker 3: A U turn for Tesla.
Speaker 2: Shares rise as Musk vows to pull back from doge plus.
Speaker 4: News of potential job cuts send Intel shares soaring.
Speaker 2: And Counterfeitzgerald teaming up with Tether and SoftBank to start
Speaker 2: its own crypto firm led by Jack Mallers. We have
Speaker 2: him live later on in this hour. The first that's
Speaker 2: check in on the markets and bigcoin is on the
Speaker 2: high side, so to a stocks Let's look at how
Speaker 2: the NASDAC is currently adding to a two day gain
Speaker 2: that is the best two day gain in about ten
Speaker 2: days since April tenth. Were actually about two weeks now.
Speaker 2: We're adding about six hundred billion dollars in terms of
Speaker 2: market capitalization to the NASDAK one hundred and I'm looking
Speaker 2: at the magnificent seven.
Speaker 3: It really is big tech on top.
Speaker 2: We're at four point eight percent and what are you
Speaker 2: looking at in the micro I'm looking.
Speaker 4: At Tesla and a stock that is up eight percent,
Speaker 4: and frankly, it is shocking when a company misses earnings
Speaker 4: by that wider margin, which we'll go through later in
Speaker 4: the show, and the stock reacts in this way. And
Speaker 4: it's about a single story Elon Musk key Man Risk
Speaker 4: and him saying next month May I will pair back
Speaker 4: the amount of time that I'm spending on Doge and
Speaker 4: I will allocate more time to Tesla. It's exactly what
Speaker 4: the market wanted to hear, and we throughout the hour
Speaker 4: and to go deep on that name because it's such
Speaker 4: a critically important one.
Speaker 3: Carrot, Let's talk.
Speaker 2: A little bit more about US Treasury Secretary Scott Besson.
Speaker 2: He's soothing the markets further with a recognition that America
Speaker 2: first does not mean America alone.
Speaker 3: He also showde for the IMF and World Bank.
Speaker 2: He shared some support, but he spoke of the need
Speaker 2: to course correct Bluemox. Kaylee Lines has more from DC.
Speaker 2: This seems to be a calming, a soothing to the
Speaker 2: market that's going on right now.
Speaker 5: Well, yeah, and you're seeing that evident in the price
Speaker 5: action today, Caroline. This is just another instance of a
Speaker 5: kind of a tone shift we've seen from the administration
Speaker 5: over the last several days, as there has been, of course,
Speaker 5: a lot of disdain for multilateral institutions emanating from the
Speaker 5: Trump White House. Scott Vessant, to some extent, putting the
Speaker 5: worst of those fears to bed, saying that the administration
Speaker 5: is willing to work with the IMF and World Big
Speaker 5: so long as they keep to their missions and avoid
Speaker 5: what he called mission creep focusing on things like carbon
Speaker 5: footprints or climate change. He also, to your point, the
Speaker 5: key line that investors likely will seee on here is
Speaker 5: America first, does not mean America alone. Kind of underscores
Speaker 5: that this administration is trying to pivot away from perhaps
Speaker 5: the worst case scenarios the markets had considered around American
Speaker 5: isolationism and protectionist policy. Keeping in mind that today's speech
Speaker 5: came after Scott Vessant yesterday told a closed door meeting
Speaker 5: of investors that the current tariff situation with China specifically
Speaker 5: is unsustainable that he expects a de escalation. President Trump
Speaker 5: then followed those remarks, speaking in the Oval Office to
Speaker 5: reporters yesterday by saying he does expect a deal with China,
Speaker 5: that the ultimate terriff freight will be well below the
Speaker 5: one hundred and forty five percent where it currently stands.
Speaker 5: And of course, we got some fresh reporting from the
Speaker 5: Wall Street Journal today that the administration could be looking
Speaker 5: at cutting those tariffs on Chinese goods by as much
Speaker 5: as half, in the range of fifty to sixty five percent,
Speaker 5: depending on the product and whether or not it is
Speaker 5: pertinent to US national security interest. So we're seeing kind
Speaker 5: of a walking back of some of these most extreme policies.
Speaker 5: I would point out, though President Trump right now is
Speaker 5: speaking with reporters on the north lawn of the White
Speaker 5: House and still reiterating that he thinks both China and
Speaker 5: the European Union have been ripping the US off, though
Speaker 5: he reiterated he does think they will get a fair.
Speaker 3: Deal with China.
Speaker 4: Bluemos Kye Lines in DC, thank you very much. Just
Speaker 4: turn back to Tesla. The company's rise in the market
Speaker 4: today can be attributed to one key moment on the
Speaker 4: earning School yesterday.
Speaker 6: Starting in next month, may my time allegation to do
Speaker 6: as will draft significantly. I'll have to continue doing it well.
Speaker 7: I think we appoy the remainder of the President's just
Speaker 7: to make sure that the waste and fraud that we
Speaker 7: start does not come roaring back.
Speaker 4: Plas saying he will allocate more time to test the
Speaker 4: starting in May, reducing his doge activity from more. Let's
Speaker 4: go to Bloomberg's estraday and I go back to irrespective
Speaker 4: of what must just said on the top and bottom line,
Speaker 4: this was one of the worst courses for a long time,
Speaker 4: but Wall Street and investors around the world are looking
Speaker 4: past that.
Speaker 8: Yes, that's absolutely right.
Speaker 9: I mean, whichever way you will.
Speaker 8: Slice these numbers, these were absolutely terrible numbers, numbers that
Speaker 8: have been not been seen in years for especially when
Speaker 8: you go to first quarter comparisons. Despite that, expectations were
Speaker 8: that numbers will be terrible, So that was kind of
Speaker 8: built into the stock, and that exactly is what the
Speaker 8: stock market.
Speaker 3: Is telling us.
Speaker 10: Like the stock is up five person last I checked,
Speaker 10: and a lot of it is really coming on from
Speaker 10: the fact that Musk is now saying that he will
Speaker 10: start pulling away from his government work and kind of
Speaker 10: focusing back on Tesla, and this is exactly what investors
Speaker 10: were hoping to hear.
Speaker 4: Now up eight percent near session highs Bloomberg session day.
Speaker 4: Thank you very much for more on Tesla. William Stein
Speaker 4: Truest Securities Managing director joins us now he maintains a
Speaker 4: hold rating on the company with a price target of
Speaker 4: two hundred and eighty dollars. You know, well, you're traditionally
Speaker 4: a semiconductor analyst, right, you think about compute and you
Speaker 4: think about AI. But I did note in your research
Speaker 4: that you, even against your own models, the fundamentals of
Speaker 4: this business missed by a really wide margin. Just take
Speaker 4: me through that data set that you have and then
Speaker 4: we'll get onto the other stuff like ROBOTAXI and AI.
Speaker 11: Yeah. I don't mean to be disagreeable or controversial, but
Speaker 11: I on mysef very clearly that that you know, when
Speaker 11: we look at results of companies, you know, it's important
Speaker 11: to understand both the broker or cell side aggregate consensus
Speaker 11: but also the byside consensus view. The company had already
Speaker 11: updated investors in the street with delivery numbers about a
Speaker 11: month ago, and I think many investors had not updated,
Speaker 11: or at least on the cell side, had not updated models.
Speaker 11: So when you compare versus sort of the so called
Speaker 11: consensus numbers, it looks like this huge miss, but in reality,
Speaker 11: you know, relative to our model that had been updated,
Speaker 11: and I think compared to other models, where if you
Speaker 11: looked at just the consensus of updated estimates, the miss
Speaker 11: was not very big. In fact, you know, relative to
Speaker 11: our model, only one and a half percent on revenue
Speaker 11: actually beat on gross profit, missed on operating profits somewhat,
Speaker 11: and they missed on by six cents. This was not
Speaker 11: like some disaster, at least relative to what we were
Speaker 11: expecting following the update a month ago. They were somewhat
Speaker 11: disappointing results relative to what we expected. The disappointment came
Speaker 11: in two places. One was in energy forage and generation,
Speaker 11: so that you think about solar roots and megapacks and
Speaker 11: that sort of thing. And the other was operating expenses,
Speaker 11: where they accelerated some AI R and D investments, And
Speaker 11: you know that's I don't think the end of the
Speaker 11: world for investors. In fact, one could take a positive
Speaker 11: spin on that.
Speaker 2: William I get that perhaps it doesn't miss versus downgraded expectations.
Speaker 2: But a profit dropped the worst profit numbers is twenty
Speaker 2: twenty one. A revenue drop nevertheless shows real fundamental issues.
Speaker 2: Here are the fundamental issues going to be alleviated by
Speaker 2: more time spent at the company by musk.
Speaker 11: Oh, I think in at least two ways, right, I mean,
Speaker 11: the two sort of obvious ways are. Number One, if
Speaker 11: you accept the supposition that Musks in the way that
Speaker 11: the investor relations team has described it to me that
Speaker 11: his greatest superpower is in delivering huge technological advancements by
Speaker 11: spending very little money but just very focused talent, then
Speaker 11: it's a big positive from that perspective. And the other
Speaker 11: is to moderate what I think musk characterized as political sentiment.
Speaker 11: I think spending less time in the public eye doing
Speaker 11: government projects will be good for the stock.
Speaker 2: We want to thank you so much William Stein, who's
Speaker 2: been joining us from Truest Securities. I know you're a
Speaker 2: man who focuses a lot on the AI opportunity, a
Speaker 2: lot on the semiconductor space as well, so we appreciate
Speaker 2: your time today. Meanwhile, though, coming up, we're going to
Speaker 2: get more on semi conductors. Intel planning more than twenty
Speaker 2: percent of job carts ahead of earnings tomorrow.
Speaker 3: More on that scub ahead. This is bluemin technology.
Speaker 4: Let's look at Intel shares surging after Bloomberg reported the
Speaker 4: company's looking to cut more than twenty percent of its staff.
Speaker 4: It will be the first major restructuring under new CEO
Speaker 4: lit Bhutan Bloombazi and King joins us with more. This
Speaker 4: is based on what a source told us, and yes
Speaker 4: there's a bloat issue, right, but there's also a refocusing issue.
Speaker 4: Reading the report, it's like, get rid of middle management
Speaker 4: and focus on actually making some money on technology that's competitive.
Speaker 12: Yeah, I mean, I think our understanding from our sourcing
Speaker 12: is that the problem is the decision making it. Intel
Speaker 12: has become bloated that everything that should be happening quickly
Speaker 12: isn't happening quickly. There's a lot of meetings, a lot
Speaker 12: of you know, empire building, a lot of silos that
Speaker 12: need to be swept away in order for them to
Speaker 12: get back on track and to try and catch up
Speaker 12: with competitors liking video and all.
Speaker 2: Eyes on how they can make moves in AI. In King,
Speaker 2: we appreciate it. It was a great scoop that came out. Meanwhile,
Speaker 2: looking at the broader tech markets and we've got on
Speaker 2: called Crawford with us ALGA portfolio manager who can speak
Speaker 2: more broadly to the tech space. But just going to
Speaker 2: this need to focus in on generative AI. The opportunity
Speaker 2: by a company like Intel. Is it still all about AI?
Speaker 2: Are we able to focus on the long term opportunity
Speaker 2: when you've got headlines just now from Trump saying well
Speaker 2: that the US will have a fair deal with China.
Speaker 13: Yeah, I look, AI is the next revolution that we
Speaker 13: have to chase. So it is important that Intel fixes
Speaker 13: a house. But you know, I think Intel has kind
Speaker 13: of lost the game on AI. What they have to
Speaker 13: figure out is if they can hold the kind of
Speaker 13: prowessign manufacturing and catch up with TSMC, because that becomes
Speaker 13: a more strategic comparative then being able to develop a
Speaker 13: competing AI chip to Nvidia.
Speaker 2: How ELSEO manufacturing there was meant to becoming more to
Speaker 2: home Ohio for example. That then gets pushed back because
Speaker 2: of current quandaries about whether there's gonna be government support
Speaker 2: for the chips acts anymore, whether there's gonna be money
Speaker 2: coming from the government. How is Intel any chip maker
Speaker 2: currently to navigate whether they invest in the US or not.
Speaker 13: Well, definitively, we need to invest in the US. I
Speaker 13: think the administration has made it very clear. I think
Speaker 13: it is a necessity that we start investing in the US.
Speaker 13: So I am completely on board with that. I don't
Speaker 13: actually think that the lack of chip Act funding is
Speaker 13: the reason that Intel is not investing in the US.
Speaker 13: I believe that they've actually lost the benefit of being
Speaker 13: first and they are struggling with going from one node
Speaker 13: to the next. We'll see where they are on at
Speaker 13: which is the next note. But as of right now,
Speaker 13: they're still outsourcing to Taiwan Semi, which shows you that,
Speaker 13: in fact TSM has taken the lead on these last
Speaker 13: three notes.
Speaker 4: And we will find out more Thursday evening when Intel
Speaker 4: post numbers, I think they'll have to answer a lot
Speaker 4: of those questions. Earnings is so interesting right in the
Speaker 4: context of everything happening around the world. I want to
Speaker 4: bring up this chart, which is average GPS Surprise and
Speaker 4: we're still kind of rattling our brains a little bit
Speaker 4: on about the Tesla share performance in this session relative
Speaker 4: to the numbers it posted. And the reason I like
Speaker 4: this chart I find it so interesting is that actually
Speaker 4: Tesla has a terrible track record compared to the other
Speaker 4: mag seven names in positive surprise on EPs. That's all
Speaker 4: to say, do you think that given the macro environment
Speaker 4: right now, all of these names might get a bit
Speaker 4: of a pass this quarter.
Speaker 13: Yeah, I think sentiment has gotten so dire that many
Speaker 13: of these companies are putting up okay numbers. Like you
Speaker 13: look at Iserge yesterday in healthcare, you know the numbers
Speaker 13: were okay. However it was better than expected. Tesla the
Speaker 13: same way. The numbers were okay, but they talked about
Speaker 13: I think some of their growth drivers, which are humanoids.
Speaker 13: They talked about how they're going to have autonomy by
Speaker 13: the end of this year. I think he said millions
Speaker 13: of vehicles by the second half of this year. And
Speaker 13: even if it's not second half of this year, as
Speaker 13: long as there's a roadmap to true autonomy, I think
Speaker 13: that's what's going to drive the next leg in Tesla.
Speaker 13: Not necessarily that the margins on the on the Auto.
Speaker 4: Side, they also pulled guidance. Do you expect that to
Speaker 4: be a move elsewhere in the MAGS seven names.
Speaker 13: I think that we could get many companies not actually
Speaker 13: giving any guidance because the uncertainty is high. So if
Speaker 13: you're a CFO or a CEO trying to navigate this market,
Speaker 13: you really have a hard time right now because you know,
Speaker 13: what do you guide to? Do you guide to one
Speaker 13: hundred and forty five percent terra for forty percent terra
Speaker 13: from China? Do you guide to and what you're seeing today?
Speaker 13: For example, invertive, i'veardive basically has assumed or an I
Speaker 13: search have assumed you know, full tariff impact? So you
Speaker 13: know I searched last night. The CFO said one hundred
Speaker 13: and forty five percent tariff is what they have included
Speaker 13: in their guidance and have guided that way just in
Speaker 13: order to buffer any kind of impact on their earnings.
Speaker 2: You say it's difficult for a COO, CEO, a CFO
Speaker 2: to navigate.
Speaker 3: Boy, is it also difficult for you and investor?
Speaker 11: Oh?
Speaker 13: For sure?
Speaker 2: So do you remain committed in the longer term? Do
Speaker 2: you stick to the longer term narratives that have driven
Speaker 2: these stocks higher over the last couple of years, or
Speaker 2: do you pause?
Speaker 3: Do you take money out?
Speaker 13: So so, I think if you haven't taken your money
Speaker 13: out already and protected yourself, now is not the time
Speaker 13: to do it.
Speaker 3: So that's the first thing.
Speaker 13: Secondly, you know by September I would I will go
Speaker 13: out on a limb and say, by September we are
Speaker 13: no longer going to be talking about these trade wars,
Speaker 13: and we will have moved on to something else and
Speaker 13: maybe maybe we'll be looking at the midterms and how
Speaker 13: great the economy is doing, but it won't be the
Speaker 13: trade wars. So I think this is a kind of
Speaker 13: a short term focus geopolitically to play a game that
Speaker 13: the US the administration is currently playing. However, it will
Speaker 13: be behind us shortly. You know, as we move forward,
Speaker 13: the AI trade is still very, very prevalent and there's
Speaker 13: no escaping it. That train has left the station. So
Speaker 13: you know, yes, we will start again, and you know,
Speaker 13: right now there's some very compelling opportunities in the market.
Speaker 4: Should America's biggest technology companies prepare for a recession?
Speaker 3: You know, tough to.
Speaker 13: Tell, and I think it's a it's a binary answer,
Speaker 13: and in part because the policies are going to dictate
Speaker 13: if we go into a recession. So you know, if
Speaker 13: we do have one hundred and forty five percent tariff
Speaker 13: and we keep ratcheting up these these tariffs on foreign
Speaker 13: goods and we have a retaliatory effect, yes we are
Speaker 13: going to go into a recession. And I would say
Speaker 13: that there would like ninety some percent probability that that
Speaker 13: would happen. If we can thread the needle and not
Speaker 13: be quite as aggressive, the situation changes and maybe we
Speaker 13: have a bit of a soft landing at you know,
Speaker 13: one percent GDP growth instead of negative.
Speaker 4: GDP growth on core crawl food of Alsia. Great to
Speaker 4: have you on the show. Thank you very much.
Speaker 3: The European Union.
Speaker 2: It's fine Apple and Meta for violating. It's tough new
Speaker 2: anti trust rules for big tech. Now the finds total
Speaker 2: seven hundred million euros about seven hundred ninety eight million dollars.
Speaker 2: They're actually relatively modest compared to previously U finds, and
Speaker 2: it's likely to be thought to be avoiding further provoking
Speaker 2: President Trump for more. Let's bring in Bloomberg's Sam Stolten.
Speaker 2: But it's provoked the hour of Apple and Meta. They've
Speaker 2: got some fighting talk in response.
Speaker 7: In hasing days. Yes, hello Karenine here from Brussels. Yes, well,
Speaker 7: Apple has said that it will actually appeal is fine,
Speaker 7: and it's about five one hundred million euros against the
Speaker 7: California firm. And Meta has gone even further with Joel Kaplan, who,
Speaker 7: of course you'll remember, spent quite a few years himself
Speaker 7: in the White House. But now Meta's global head of policy,
Speaker 7: saying that this is a discriminative act from the European
Speaker 7: Union and that it is continuing to unfairly targets American businesses.
Speaker 7: So it's certainly a ratcheting up in these transatlantic tensions. Indeed,
Speaker 7: metas find itself was a bit less than than Apple's,
Speaker 7: it was only two hundred million. But generally, despite these
Speaker 7: finds being lower than traditional anti trust penalties, they still
Speaker 7: haven't particularly pleased firms on the other side of the Atlantic.
Speaker 4: The logic being that because they're lower than historic penalties,
Speaker 4: they won't draw the hor of President Trump. He won't retaliate.
Speaker 4: But I think that a spokesperson that for the E
Speaker 4: that we spoke to you for the story, points out
Speaker 4: that this had nothing to do with trade.
Speaker 14: Sam Yeah, I mean that's the message coming from the
Speaker 14: European Commission. This is an independent regulatory action. It's got
Speaker 14: nothing to do with the trade talks whatsoever. But the
Speaker 14: scuttle butt here in.
Speaker 6: Brussels and around town generally is that, of course the
Speaker 6: EU has had powers under the Digital Markets Act to
Speaker 6: find these companies up to ten percent of global annual revenue,
Speaker 6: and actually these finds are less than zero point one
Speaker 6: point five percent of global annual revenue for both Matter
Speaker 6: and Apple. So there is something that is holding the
Speaker 6: EU back here, and it is more likely than not
Speaker 6: despite what the European Commission says, these ongoing trade negotiations.
Speaker 4: Being there's Sam Stalton in Brussels, thank you very much.
Speaker 4: Another story we're tracking, the co founder of Instagram says
Speaker 4: the photo sharing app could have thrived without Facebooks. Kevin
Speaker 4: Sistrom testified that Meta CEO Mark Zuckerberg treated Instagram's growth
Speaker 4: as quote threat and starved the app of resources after
Speaker 4: the purchase. The US government's c to prove the social
Speaker 4: media giant created an illegal monopoly through its acquisitions of
Speaker 4: Instagram and the messaging service WhatsApp curR.
Speaker 2: Yet more antitrust case is going on ed and the
Speaker 2: Justice Department's effort to break up Google is one of them.
Speaker 2: Mrks Dave Alba joins US on the latest out of
Speaker 2: what is trying to find remedies to ensure that Google
Speaker 2: no longer seems to be a monopoly. One of those
Speaker 2: remedies the government wants is to sell off Chrome, and
Speaker 2: seemingly there's a buyer for it.
Speaker 15: Yeah, Yeah, we heard in trial testimony yesterday that the
Speaker 15: head of product for Chad gbt Nick Turley, from open Ai,
Speaker 15: said that open Ai would be interested in buying Chrome
Speaker 15: if it were actually for sale. Google of course does
Speaker 15: not intend to sell it and is fighting sort of
Speaker 15: this remedy that is proposed by the DOJ. But you know,
Speaker 15: they will see how the rest of this remedies trial
Speaker 15: goes and what judge Meta, the judge in this case,
Speaker 15: eventually decides.
Speaker 1: DAVI.
Speaker 4: A point of intrigue is that Chromium, the underlying code
Speaker 4: based for Chrome, is open source, right, and I think
Speaker 4: Google will lean heavily into the idea that in the
Speaker 4: browser market that's a really good thing. Has there been
Speaker 4: any debatea that so far?
Speaker 6: Yeah.
Speaker 3: Absolutely.
Speaker 15: Google's defense in not wanting to spin off Chrome is that, look,
Speaker 15: the underlying technology for Chrome is open source, and it's
Speaker 15: used by different browsers from different companies, including Amazon's Silk Browser.
Speaker 15: But the DOJ still contends that Chrome is a key
Speaker 15: gateway into the Internet and Internet search specifically, and if
Speaker 15: it were to be controlled by another party, then that
Speaker 15: would help sort of break up the power that Google
Speaker 15: has about users, data, users, queries, everything that feeds into
Speaker 15: Google Search and improving that product.
Speaker 3: Bloo Books.
Speaker 4: Davie Albat, thank you very much. We have some breaking
Speaker 4: news crossing the Bloomberg. Treasury Secretary Scott Besson says that
Speaker 4: there has been no unilateral offer from Trump to cut
Speaker 4: China tariffs. He is speaking to reporters on the sidelines
Speaker 4: of the Institute of International Finance event in Washington, where
Speaker 4: he was giving a keynote, and this is the keywording,
Speaker 4: no unilateral offer from Trump to reduce tariffs on China.
Speaker 4: There had been earlier reports, of course from the Wall
Speaker 4: Street Journal that the President was considering a tiered approach
Speaker 4: to tariffs, but the wording here incredibly specific. He also
Speaker 4: has been commenting on remarks by the President about firing
Speaker 4: Federal Reserve Chair Powell, saying that in Besson's case, the
Speaker 4: Treasury secretary quote does not have a stand on the
Speaker 4: Trump Powell firing remark. And Caro, that's something in the
Speaker 4: market's context. With the Nazak one hundred pushing up three
Speaker 4: point one percent that we've been tracking.
Speaker 2: Closely off of its highs, are still trading up on
Speaker 2: the day.
Speaker 3: Welcome back to Bloomberg Technology and Caroline Heide.
Speaker 4: In New York and I met lod Loo in San Francisco.
Speaker 4: Carry some moves in the market.
Speaker 2: Boy are their moves, and we may higher on the Nasdaq,
Speaker 2: up more than three percent on the Nasdaq one hundred,
Speaker 2: even as we try and digest some.
Speaker 3: Of the overall headline risk.
Speaker 2: Whether or not we're seeing a cooling down of tensions
Speaker 2: around China, whether we have Trump having some more positive
Speaker 2: narrative towards the country, but Scott Bessant coming out clearly saying, look,
Speaker 2: there is no full China trade deal yet. It's going
Speaker 2: to take two to three years. So we come off
Speaker 2: of our highs a little bit. We're up two point
Speaker 2: eight percent. No unilateral offer from President Trump to cut
Speaker 2: China's tariffs as yet. But we look underneath the hood
Speaker 2: with some of the individual stocks that are on the move.
Speaker 2: I want to shine light on European trading. We just
Speaker 2: finish SAP surged eight point eight percent. We had the
Speaker 2: best innings in six years. They post really strong profitability
Speaker 2: and a great backlog for their cloud orders. What does
Speaker 2: that mean for the company that is run by Bill McDermott,
Speaker 2: which is a service now of course he used to
Speaker 2: run sap over in Germany.
Speaker 3: Now he runs service.
Speaker 2: Now up six point percent their earnings after the bell.
Speaker 2: Will they post some resiliency? Remember they're exposed some and
Speaker 2: the DOGE cuts across government. So two is IBM. We're
Speaker 2: up just two percent ahead of their earnings after the
Speaker 2: bell as well. Revenue is likely to flatline for that
Speaker 2: particular business.
Speaker 14: Ed.
Speaker 3: Let's go back to Tesla.
Speaker 4: The stockers also pulled back literally in the last couple
Speaker 4: of minutes on those headlines from Treasury Secretary Scott Bessen,
Speaker 4: but still up seven percent. Not up on fundamentals or
Speaker 4: the core of the earnings report, but literally the commentary
Speaker 4: from Elon Musk that he will pare back time at
Speaker 4: DOGE and add more time, allocate more time to Tesla.
Speaker 4: Bloomberg's Craig two Dell, who leads our global coverage of
Speaker 4: the auto industries with US. You and I have been
Speaker 4: pouring through the commentary on the call and the earning steck,
Speaker 4: and there are contradictions in there about the core business
Speaker 4: demand hit from the backlash to DOGE, or is it
Speaker 4: the brand or is it something else?
Speaker 16: Hello, I do think the first quarter we absolutely have
Speaker 16: to acknowledge that the model why changeover was disruptive, right,
Speaker 16: and it's going to take us some time to to
Speaker 16: sort of parse, you know, just how much demand there
Speaker 16: is for that that model. It is after all, Tesla's
Speaker 16: most popular far and away and it's one of the
Speaker 16: best selling vehicles in the world. You know, the question
Speaker 16: is going to be, you know, how much can Tesla
Speaker 16: rely on on that one vehicle and you know, can
Speaker 16: it reliably continue to be you know, sort of a
Speaker 16: one trick pony where the Model three has has you know,
Speaker 16: been a letdown despite that vehicle getting a makeover recently,
Speaker 16: and the rest of the lineup is is you know,
Speaker 16: kind of sucking win. The cyber truck is not living
Speaker 16: up to Musk's expectations in the least.
Speaker 2: Yeah, significant number in sales down for the cyber truck,
Speaker 2: but there is going to be a cheaper model why
Speaker 2: in the first half of this year. That's what helps
Speaker 2: send the shares higher. So two is the Robotaxi outlook
Speaker 2: for what's happening in Austin, and there was real recommitments
Speaker 2: scenarios of the business.
Speaker 16: Yeah, I do think that there was a concern after
Speaker 16: some reporting by by Reuters a few days ago that Uh,
Speaker 16: maybe there was a setback in the timing for more
Speaker 16: affordable vehicles that they've been you know, saying well, we'll
Speaker 16: be on the way for the first half. I think
Speaker 16: there was, you know, not necessarily a full throated denial
Speaker 16: of that. There was a comment during the call about
Speaker 16: you know, a ramp not going as as smoothly as
Speaker 16: as hoped.
Speaker 4: Uh.
Speaker 16: And I do think that you know, the even even
Speaker 16: the you know, driverless rides that they're going to start
Speaker 16: in Austin, I think you know, Musk talked about that,
Speaker 16: you know, being a pretty limited initial launch of you know,
Speaker 16: just a handful of vehicles. So maybe some expectations setting
Speaker 16: there in light of how you know, Musk tends to
Speaker 16: really sort of promise the moon, it's maybe a little
Speaker 16: surprising to see the shares jumped so dramatically, you know,
Speaker 16: when you know, when some of these reasons for sort
Speaker 16: of being swage were not necessarily forthroaded.
Speaker 4: Bloombergs Crage dool in London. Thank you very much for
Speaker 4: more on Tesla. We're joined now by Alexandra Mertz, a
Speaker 4: longtime Tesla shareholder on social platform x. She goes by
Speaker 4: at Tesla, Booma Mama and is seen frankly as a
Speaker 4: leader among the very large group of retail investors that
Speaker 4: follow the ev maker closer. She's also the CEO and
Speaker 4: founder of L and F Investors Services. Alexandra, thank you
Speaker 4: for joining us back on Bloomberg Technology. Let's just start
Speaker 4: with the basic reaction you have to Elon Musk opening
Speaker 4: the call saying, starting in May, I will pair back
Speaker 4: the amount of time spent on Doge and allocate more
Speaker 4: time to Tesla.
Speaker 9: Thanks for having me ed yes with pleasure. Well, first
Speaker 9: of all, I wanted to thank Elon for having done
Speaker 9: the job at Dodge. He's been doing this has been
Speaker 9: important for any US taxpayer and for anybody that's interested
Speaker 9: in the United States becoming the power it should be.
Speaker 9: And he has been stellar in getting this organized. How
Speaker 9: he is stellar in organizing anything, So I'm really pleased
Speaker 9: he puts some time and effort into this. It's always
Speaker 9: been clear both by Elon and by President Trump that
Speaker 9: this would be limited in time for his full time,
Speaker 9: a full time allocation of time. But this is coming
Speaker 9: to an end in May, which is not surprising at
Speaker 9: all other than people who may not have listened. So
Speaker 9: him dialing it down to one to two days a week,
Speaker 9: and do remember Elon's week is a seven day week
Speaker 9: and not a five day week, So him dialing it
Speaker 9: down to one to two days of Dodge oversight and
Speaker 9: still being available to it doesn't mean he's completely backing
Speaker 9: out of it. We're happy as Tesla shareholders that he's
Speaker 9: going to put more time into Tesla, but frankly, nothing
Speaker 9: has been delayed or missing the four or five months
Speaker 9: that he has now been with Dodge. The launch of
Speaker 9: the new model why simultaneously in four factories and three continents,
Speaker 9: shows how strong the Tesla team is, whether Elon is
Speaker 9: in Washington, DC or somewhere else in the world. So
Speaker 9: there is really you know, there was no concern whatsoever
Speaker 9: and people being surprised by the stock going back up.
Speaker 9: As Greg said, I think they have not watched what
Speaker 9: Tesla is actually going to accomplish.
Speaker 4: Alexandria something you just said that nothing has been missed.
Speaker 4: I was also trying to understand there was some contradiction
Speaker 4: between what Elon must said on the demand side and
Speaker 4: absence of macroeconomic impacts. They don't see an impact of demand,
Speaker 4: but the CFOs in Asia was quite clear about the
Speaker 4: brand impact in the quarter, the first quarter and quote
Speaker 4: the changing political landscape having an impact on future sales.
Speaker 4: I have a question for you from X from the audience,
Speaker 4: from one of your fellow community members essentially, and it
Speaker 4: asks you you usually live in California, what is your
Speaker 4: gauge of quote brand damage given your geography? And that
Speaker 4: question comes from Farzad.
Speaker 9: Yeah, that's a very good question of Farzad. I honestly
Speaker 9: hear in Santa Barbara don't see any impact. There are
Speaker 9: more Teslas out there. I picked up my new model
Speaker 9: why last Saturday, and the Tesla Center was busy. It
Speaker 9: was crazy actually, But at the same time, from ten
Speaker 9: to twelve there was the typical Saturday morning protestation in
Speaker 9: front of the teslast always the same people. They get
Speaker 9: carried in with buses at ten o'clock, they start at
Speaker 9: twelve o'clock, they go off. And this will have an impact.
Speaker 9: This has an impact on people that probably would not
Speaker 9: have purchased Tesla's but still want to make noise. On
Speaker 9: the other side, on the upside, there is now a
Speaker 9: whole new Cleontele. We're seeing many people that have never
Speaker 9: considered EV's now considering EV's And in particular Tesla's and
Speaker 9: so you know it is give and take. I'm not
Speaker 9: saying it was completely without brand damage, but clearly the
Speaker 9: overall goal of Tesla putting real a on the streets
Speaker 9: being the one vector that will be the one transporting
Speaker 9: anybody and everybody in the next decade. That hasn't been
Speaker 9: changed in anything.
Speaker 2: But Alexandra, they're kind of late to that party, certainly
Speaker 2: slower than Weimo. I got my Weaimo in Arizona just
Speaker 2: last week. What of the rollout and when it becomes
Speaker 2: a real business.
Speaker 3: Model action here?
Speaker 9: That was actually the key phrase I found yesterday in
Speaker 9: the in the Earning School when Elon for the first
Speaker 9: time quantified when he expects significant revenues from full self drive,
Speaker 9: which he set by middle of twenty twenty six, and
Speaker 9: that is just around the corner. So and the Weymo model.
Speaker 9: That was actually really a fun moment because the whole
Speaker 9: team there had a good chuckle about Waymo costing way
Speaker 9: more money. I mean, as you know, Weimo is built
Speaker 9: on other companies vehicles, is very expensive and is GEO fenced,
Speaker 9: so it is in no way comparable. But I mean
Speaker 9: no doubt they have done a great service of bringing
Speaker 9: full self driving to the masses and have to be
Speaker 9: congratulated for it is in no way comparable what Tesla has.
Speaker 9: Tesla's will work everywhere, as has been proven with the
Speaker 9: rollout of FicT in China, they had hardly any any
Speaker 9: information on Chinese roads, yet were immediately able to adopt
Speaker 9: first to China.
Speaker 2: Alexandra is always great to have you on the show.
Speaker 2: Thanks you for our taking losing so Alexandra Marts of
Speaker 2: L and F Investor Services. Now coming up, Jeff Rosenthal
Speaker 2: joins us to discuss his new venture capital funds CIV,
Speaker 2: back in tech startups tackling energy and manufacturing as a
Speaker 2: blue meg technology, There's a new venture capital fund on
Speaker 2: the scene, CIV, launching with an inaugural two hundred million
Speaker 2: dollar fund to back startups trying to reshape manufacturing electrician
Speaker 2: compute needs. Jeff Rosenthal, co founder a managing partner of CIV,
Speaker 2: joins us.
Speaker 3: Now, you've got some big.
Speaker 2: Names behind you as well, some real founders in USV
Speaker 2: for example, Fred Wilson's on board grins shotwell as well
Speaker 2: of SpaceX. Where are you already allocating the money because
Speaker 2: you've already invested in certain startups.
Speaker 17: Yeah, you know, we built this firm for a specific purpose,
Speaker 17: and that is to back and build companies focused on
Speaker 17: critical infrastructure and industry here in the US, and so
Speaker 17: that spans digital infrastructure, robotics, AI and compute. Really guided
Speaker 17: by this fast moving, fast approaching set of megatrends with
Speaker 17: AI and compute and the power needs behind it, the
Speaker 17: reshowing and reindustrialization of global industry following COVID Ukraine and
Speaker 17: now a new administration, and really just the electrification of everything.
Speaker 17: So we're seeing this inflecting demand, you know, driving this
Speaker 17: demand and supply, and it now is not only a
Speaker 17: deep need for our economic well being, but it's also
Speaker 17: national security issue.
Speaker 4: Jeff, when did you conceive the idea for the firm
Speaker 4: and the fund and when did you start building it,
Speaker 4: because clearly this is very much in line with what
Speaker 4: this administration is trying to do in America with heavy
Speaker 4: industry of different types.
Speaker 17: We started building this firm a couple of years ago. Really,
Speaker 17: you know, thinking about the origination of the idea of
Speaker 17: backing and building in these spaces, I don't think that
Speaker 17: we could have predicted that these trends would have accelerated
Speaker 17: the degree that they have in the last say six
Speaker 17: to twelve months across nuclear and critical infrastructure, supply chain, logistics, manufacturing.
Speaker 17: But you know, we have both the background in investing
Speaker 17: in these themes but also building companies in these things,
Speaker 17: and so we're not just passive capital. We actually also
Speaker 17: roll our seeds up.
Speaker 2: I mean, you've invested in SpaceX, Patrick has founded a
Speaker 2: clean energy business, You've got a a joy over from COT.
Speaker 2: But what of the thesis of where you invest in
Speaker 2: how you actually seed but also co found businesses like
Speaker 2: a new me a business.
Speaker 3: So what's the recipe here?
Speaker 17: Yeah, so we're principally an investment firm. We spend the
Speaker 17: majority of our time in capital really identifying and then
Speaker 17: earning the right to back the best founders when we
Speaker 17: have a really defined thesis, a real right to win,
Speaker 17: and a partner who is going to lead that business
Speaker 17: as the active co founder and CEO.
Speaker 3: Only then what we co.
Speaker 17: Found businesses on platform. So before we raised in the
Speaker 17: outside capital, really to prove the thesis to ourselves ourselves,
Speaker 17: we made six investments, five or direct investments in companies
Speaker 17: like base Power, Crux, Verse Center Systems, and then our
Speaker 17: first build company As you mentioned, we co founded the
Speaker 17: Nuclear Company, which is a fleet scale nuclear developer really
Speaker 17: powering AI.
Speaker 4: In large gale industry here in the United States, Jeff,
Speaker 4: Manufacturing and growing manufacturing requires capital. It's expensive. You're looking
Speaker 4: at the early stage. So what are the innovations that
Speaker 4: you hope to find that I guess lower the cost
Speaker 4: of doing business in this country or something of that effect.
Speaker 15: Yeah.
Speaker 17: Absolutely, I think that when you look at just the
Speaker 17: cost of doing business in this country, when we think
Speaker 17: about the reshoring of heavy industry or critical industry, one
Speaker 17: of the things that people will point to as a
Speaker 17: major challenge is just the cost of labor. And I
Speaker 17: think that there's a lot of technological innovation across robotics
Speaker 17: and AI that gives us confidence that that is something
Speaker 17: that we will be able to compete on a global
Speaker 17: scale here domestically. The beauty of many of these businesses
Speaker 17: compared to say, traditional venture capital Silicon Valley style software companies,
Speaker 17: is that they scale often with non deleute of capital.
Speaker 17: So we focus on businesses that are actually highly efficient
Speaker 17: to equity and then can scale with asset capital or debt.
Speaker 4: Jeffros Civ, co founder, managing partner thank you for joining
Speaker 4: us here on the show.
Speaker 2: Crypto News Counterfitzgerald is teaming up with Teather and SoftBank
Speaker 2: to create a new crypto company called twenty one Capital.
Speaker 2: It's going to be accumulating bitcoin in a similar fashion
Speaker 2: to say that of Michael Sailor's strategy, plans to lord
Speaker 2: more than forty two thousand bitcoin, of course worth more
Speaker 2: than four billion dollars.
Speaker 3: And Jack Mallis is also co founder.
Speaker 2: He's CEO of twenty one Capital, and he joins us,
Speaker 2: Now we asu you have you on because a strike.
Speaker 18: Can get me fired up.
Speaker 3: How you doing, Calind Good to see you Jack. When
Speaker 3: did this idea come to buy?
Speaker 6: Uh?
Speaker 18: The founding story? So I co founded the business with Tether.
Speaker 18: I would say I've known the Tether group for over
Speaker 18: a decade. There just weren't that many bitcoiners around over
Speaker 18: ten years ago. So we you know, we've done a
Speaker 18: lot of work together in El Salvador, et cetera. We've
Speaker 18: been so inspired by Michael Saylor and all of the
Speaker 18: public companies acquiring bitcoin. But I would say over the
Speaker 18: last few years that inspiration turned into what we thought
Speaker 18: was an opportunity and a hole in the market that
Speaker 18: we could deliver on which is bringing blue chip credibility
Speaker 18: and startup upside. We feel like we can bring enough
Speaker 18: capital and be big enough to win. We're small enough
Speaker 18: to grow, and most importantly, a pure bitcoin business. A
Speaker 18: lot of these companies, they're pivoting from a past operating business,
Speaker 18: they're rebranding, changing their name. They're maybe selling video games
Speaker 18: to buy bitcoin, or selling medical equipment to buy bitcoin.
Speaker 18: And we're a purpose built bitcoin company. We're gonna build
Speaker 18: bitcoin products, bitcoin cash flow, and we're going to give
Speaker 18: bitcoin per share growth to shareholders and be hopefully the
Speaker 18: best way for investors to get bitcoin exposure in the
Speaker 18: public markets.
Speaker 4: Jack, I think off camera just before we started to
Speaker 4: use the word vehicle at vehicle for bitcoin, I think
Speaker 4: like a reasonable question that people have is what does
Speaker 4: the CEO of a new company whose mission is to
Speaker 4: accumulate bitcoin do day to day? What is it that
Speaker 4: you're going to try and manage or achieve.
Speaker 18: Yeah, So for all the bitcoiners out there, we encourage
Speaker 18: you to check out our filing. We've introduced two new
Speaker 18: metrics to the public markets. One is BPS stands for
Speaker 18: bitcoin per share as opposed to earnings per share, and
Speaker 18: the other is BRR, which stands for Bitcoin return rate.
Speaker 18: And my job and what I'm dedicated to do for
Speaker 18: our shareholders in which we view similar to our customers,
Speaker 18: is grow our bitcoin per share. So we're an operating company,
Speaker 18: and when you buy a share of twenty one in
Speaker 18: a hypothetical sense, what we intend to do is, let's
Speaker 18: say our bitcoin per share zero points zero five, our
Speaker 18: intent is to be able to grow that to zero
Speaker 18: point zero six bitcoin per share zero point zero seven
Speaker 18: bitcoin per share. Where a vehicle, like an ETF, your
Speaker 18: exposure is static. So twenty one is an operating business
Speaker 18: and we will be building bitcoin products, bitcoin operative cash flow,
Speaker 18: and then using the capital markets to accreatively grow the
Speaker 18: bitcoin on our balance sheet. So we want our shareholders
Speaker 18: to get wealthier, get richer in bitcoin terms, and our
Speaker 18: metrics encourage the market to view us, not in fiat terms,
Speaker 18: in bitcoin terms, because we're not here to necessarily beat
Speaker 18: the market. We're here to build a new one and
Speaker 18: encourage the world to adopt bitcoin in a sense that
Speaker 18: we believe it hasn't yet.
Speaker 2: But Jack, you already have a bitcoin product and it
Speaker 2: strike yes, and it's where people can buy, sell, stall
Speaker 2: that crypto. Well, how much of that are you still
Speaker 2: going to be leading that business?
Speaker 13: Yeah?
Speaker 18: And the CEO both companies we're actually disclosing today X
Speaker 18: Strike some of our financials. So Strike immensely profitable. We
Speaker 18: have over twenty percent even a margin, eighty five percent
Speaker 18: gross profit margin. We have only twenty five employees, so
Speaker 18: on a grosser net profit per employee basis, we got
Speaker 18: to be one of, if not you know, the biggest
Speaker 18: in the bitcoin space in that regard, and so it's
Speaker 18: an incredibly strong business. It's doing well. I'm so proud
Speaker 18: of the employees and our investors, and thankful for our customers.
Speaker 18: And you know, Caroline, you can just do things. And
Speaker 18: I'm going to lead both businesses. I truly believe my
Speaker 18: purpose on this planet is to try and help bitcoin
Speaker 18: have a chance to change the world. And what I
Speaker 18: believe is the right direction, and I think Strike in
Speaker 18: twenty one both independently work towards that.
Speaker 4: Jack, you have plans to raise capital, and I guess
Speaker 4: not just like as a one off over time raise capital, Right,
Speaker 4: how will that work in practice? What mechanisms we use?
Speaker 4: And a lot of people that watch the show like
Speaker 4: ask if they're not registered institutional invest is like, how
Speaker 4: can they participate in that?
Speaker 18: Yes, I thought for a second you were going to
Speaker 18: offer me some money to buy some bitcoin.
Speaker 4: Absolutely not, absolutely not. Can and go with my actual question.
Speaker 18: No, totally, So listen. We are hopeful to have our
Speaker 18: share listed on a stock exchange under the ticker XXI.
Speaker 18: Today we are trading under CEP, which Caroline mentioned is
Speaker 18: our Canter Equity Partners, and that stock is trading and
Speaker 18: live today. If it's successfully merged, upon closing, it will
Speaker 18: be XXI. We do intend to raise as much capital
Speaker 18: as we possibly can to acquire bitcoin. Again, my one
Speaker 18: rule to my shareholders is it will be a creative
Speaker 18: Our bitcoin per share will grow. We will never have
Speaker 18: bitcoin per share negative at least that's our intent. Our
Speaker 18: intent is to make sure that when you're a shareholder
Speaker 18: of twenty one that you're getting wealthier in bitcoin terms,
Speaker 18: and that's my job as a CEO to deliver that.
Speaker 18: So we plan on raising capital in all different type
Speaker 18: of sectors in markets and really blending bitcoin and incorporating
Speaker 18: it in the traditional financial system to deliver a powerful
Speaker 18: equity to the public markets.
Speaker 2: For bitcoiners is that the selling poin versus ETF because
Speaker 2: you came up with this idea over the course of years,
Speaker 2: and since that time there's not just been strategy that
Speaker 2: you can invest in or block, but you can get
Speaker 2: st bitcoin ats what's the upside? And in fact, a
Speaker 2: viewer from boombergs asking like, how can you have more
Speaker 2: bits than an ATF?
Speaker 4: Right?
Speaker 18: Okay, So I gotta be clear, I'm not preaching a
Speaker 18: future that I can I can promise. This is hypothetical
Speaker 18: and this is our intent Somewhere. My lawyers are like,
Speaker 18: that's our guy, right, But our intent, Caroline, is that
Speaker 18: when you buy a share of twenty one, and let's
Speaker 18: say that's zero points zero zero five bitcoin per share,
Speaker 18: we go out and we intend to close deals, build products,
Speaker 18: add bitcoin to our treasury, to where in which you
Speaker 18: get a press release and you say, wow, twenty one's
Speaker 18: bitcoin per share group from zero points zero five to
Speaker 18: zero point zero six. I just got more bitcoin exposure.
Speaker 18: I got wealthier in bitcoin terms, just by being a
Speaker 18: shareholder of this company. And ETF is not an operating company,
Speaker 18: you know, IBID is an outgrowing your exposure to bitcoin.
Speaker 18: It's a static exposure through their security instrument. Whereas for
Speaker 18: us we're a business. I'm a CEO. I get up,
Speaker 18: I work every day to grow how much bitcoin your
Speaker 18: share represents on our balance sheet, that's the big difference.
Speaker 4: Twenty one Capital CEO Jack mallers Endstrike CEO. Great to
Speaker 4: have you back on.
Speaker 2: The show, Caro, And that does it for this edition
Speaker 2: of Bloomberg Technology.
Speaker 3: Are busy one ad?
Speaker 4: Yeah, let's just quickly look at some of the names
Speaker 4: we care about. Tesla it's up because Elon Mask has
Speaker 4: pledged to return to Tesla, less time at DOGE Intel
Speaker 4: Bloomberg Reporting is cutting twenty percent of staff, getting focused
Speaker 4: on tech, cutting out middle management, and the market broadly's
Speaker 4: pulled back right carrow since those bestent heads. But there's
Speaker 4: green on.
Speaker 2: That screen, green on the screen as we anticipate IBM
Speaker 2: service now earnings, and of course we've got Intel tomorrow.
Speaker 3: Don't forget to check out our podcast. You can find
Speaker 3: it on the terminal as well as online
Speaker 2: On Apple, Spotify and iHeart this is Bloomberg Technology.